Over the last several years, the approach to process design and improvement for insurance companies has evolved to one that follows this sequence:

The theory behind this methodology is that design follows customer requirements. This technique supports a clean-slate approach to process design, without the burden and constraints of the current environment. The reality is that this approach is most effective when there are time and/or budget constraints, a lack of readily available technology and, in many situations, when most or all process design benefits can be achieved without major technology upgrades. Recently, some of the assumptions of this approach have been challenged. Technology is now readily available from vendors to support the core functions of underwriting, policy administration, billing and claims. And many of these solutions are comprehensive, flexible and affordable when compared to the cost of developing these capabilities in-house from scratch. When new technologies are proposed, vendors tend to state that their system will accomplish all the requirements of the RFP, either as base functionality, configuration or customization. While it is true that there is now a broad array of affordable solutions available to insurance companies, all technologies are designed for a core set of requirements that the technology is intended to support. Understanding this “sweet spot” is a critical part of the evaluation and selection process. Accomplishing this calls for a revised approach to process design. In situations where it is initially understood that new technology will play a part in the redesign, the processes themselves should be developed and evolved with the technology in mind. The following sequence will help companies select the technology that best supports effective processes:

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